Chile – New Zealand
A Transpacific Relationship
Mr. Carlos Furche
Director General for International Trade and Economic Affairs
Ministry of Foreign Affairs, Chile
Major Consensus on
• Democratic Political System
• Market Oriented Economy
• Open Market and International Engagement
• Social Cohesion
Main achievements since 1990
• Democratic Institutional Framework
• International Re - Engagement
• Economic Growth and Development
• Poverty Reduction
Chile: Main Figures
TOTAL AREA (includes Eastern Island)
POPULATION
GDP 2006
INCOME PER CAPITA (PPP, 2006)
EXCHANGE RATE
UNEMPLOYMENT RATE (April, 2007)
GDP GROWTH (Average 1990 - 2006)
GDP PROJECTED GROWTH 2007
GOODS EXPORTS (2006)
FISCAL SURPLUS (2006)
POVERTY LEVEL
756,096 Sq Km
16.3 million
US$ 146 billion
US$ 12,983
1 US$ = 530 CLP
6.4%
5.6%
6.0%
US$ 57,756 billion
7.9%
13.7%
Economic Growth, Trade and Poverty (1990-2006)
US$ Million
% of Pupulation
GDP-TRADE - POVERTY
120.000
45
40
100.000
35
30
80.000
25
60.000
20
15
40.000
10
20.000
5
-
0
1990
1992
1994
1996
GDP
TRADE
1998
2000
2003
POVERTY
2006
Source: World Economic Forum, 2007
42
In
S
di
ou
a
43
th
Af
ric
a
45
In
do
ne
si
a
50
Ita
ly
27
Th
ai
la
nd
35
C
hi
le
H
U
on
S
6
g
Ko
ng
11
Ta
iw
N
an
ew
13
Ze
al
an
S
d
ou
23
th
Ko
re
a
24
1
Fi
nl
an
d
2
D
en
m
ar
k
S
4
in
ga
po
re
5
S
w
itz
w
er
la
nd
Competitiveness
7
6
5
4
3
2
1
0
D
en
m
ar
k
1
Fi
nl
a
S
in nd
ga
2
po
S
w
itz re 3
er
la
nd
4
C
an
a
H
on da
g
5
U
K
ni
te ong
d
6
S
ta
N
te
et
s
he
7
rla
nd
s
8
N
ew U
Ze K
al 10
an
d
14
Ta
iw
an
19
C
h
M ile
2
or
oc 0
co
P
62
ak
is
B
an ta
n
gl
ad 71
es
h
E
74
cu
ad
or
76
C
u
V
en ba
ez 78
ue
la
81
A
ng
ol
a
82
Business Environment
10
(2007-2011 Forecast)
9
8
7
6
5
4
3
2
1
0
Source: Economist Intelligence Unit (www.eiu.com ), June 2007
K
on
g
U
S
Source: Heritage Foundation, 2006
11
D
en
m
ar
N
k
et
13
he
rla
nd
s
14
F
in
la
nd
16
Ja
pa
n
G
18
er
m
an
y
19
T
ai
w
an
S
ou
26
th
K
or
ea
36
C
hi
le
4
Z
ea
la
nd
5
Ire
la
nd
7
C
an
ad
a
10
N
ew
1
S
in
ga
po
re
2
H
on
g
Economic Freedom Index
100
90
80
70
60
50
40
30
20
10
0
Chile, the lowest Country-Risk in Latin America
Country
Fitch
Ratings
Standard & Poor’s
Moody’s
United States
AAA
AAA
Aaa
UK
AAA
AAA
Aaa
Singapore
AAA
AAA
Aaa
Chile
A
A
Baa1
China
A
A-
A2
Mexico
BBB-
BBB
Baa1
Brazil
BB-
BB-
Ba3
Argentina
DDD
B-
B3
Source: Fitch Ratings, Standard & Poor´s, Moody´s, 2006
Transparency in Latin America
New Zealand
1
UK
11
USA
20
Chile
20
Spain
23
Brazil
70
Mexico
70
Argentina
Corruption Perception Index
(from 159 selected countries)
93
Source: Transparency International (www.transparency.org), 2006
Co
n
C o tr o
rr l o f
up
t io
n
w
La
of
le
Ru
g
Q u la
ua to
lit ry
y
Re
li
S t tica
ab l
A b i li t
s ya
V i e n c nd
ol e
en of
ce
G
ov
E f e rn
fe m
c t en
iv t
en
es
s
Po
Vo
Selected OECD countries
ic
Ac e a
co n d
un
ta
bi
li t
y
Dimensions of Governance – World Bank 2006
Cross- country Comparisons
GERMANY
95,7
75
90,5
91,2
94,3
93,2
BELGIUM
94,7
69,2
92,4
87,8
91
91,3
SPAIN
80,3
58,2
82,5
82
84,8
84
FINLAND
98,1
99
97,6
97,1
98,1
100
FRANCE
92,3
61,5
85,8
82,9
89,5
91,7
IRELAND
93,3
89,4
91
97,6
92,4
92,2
ITALY
86,5
56,3
67,3
74,1
60
64,1
NORWAY
98,6
91,8
98,1
90,7
99
96,6
PORTUGAL
90,4
76
º
81
82,9
82,5
Average OECD
90,6
76,4
90
89,6
90
90,2
CHILE
87,5
77,4
87,7
91,7
87,6
89,8
Average Latin America
51,6
37,7
43,2
45,4
35,4
42
Source: /info,worldbank,org/governance/wgi2007/mc_chart,asp
Kauffmann D,, A Kraay, and Mastruzzi 2007: Governnace Matters VI: Governance Indicators for 1996-2006
Percentile rank: the percentile rank indicates the percentage of countries in the world that score below a given country
Labor and Education
• Total Labor Force : 6.1 million
More than 60 Universities
• Labor Force in Santiago: 2.8 million
48 Professional Institutes
• Education:
- Primary:
109 Technical Centers
98.6%
- Secondary:
90%
- Professional:
31.4%
21 MBA Programs
Education Average (years)
1992
2002
National
7.5
8.5
Labor Force
9.2
10.5
Source: Ministry of Education of Chile (www.mineduc.cl), National Institute of Statistics (www.ine.cl ), 2006
Chilean Trade Policy
• Chile’s development strategy is based on the opening of the Chilean market
• 65% of Chile’ GDP is represented by trade (trade in goods and services =
75% of the GDP figure)
• Opening market strategy:
• Unilateral: low and flat tariff (6% MFN), though real average tariff applied
is 1.8%
• Bilateral: for the past 15 years, Chile has opted for bilateralism through
free trade, economic complementation, and preferential agreements in
lined with its WTO commitments.
• Multilateral: WTO, APEC and in OECD negotiations
Chile’s Trade with the World 1990 - 2006
Chile is a “global trader” as it is reflected in this chart (with an ascending
tendency)
Millions of US$
90.634
70.000
65.000
69.192
Exports represent 62%
of Chile’s total
exchange with the world
60.000
Trade
55.000
Exports
50.000
53.914
55.833
45.000
38.291
40.000
35.000
32.205
35.268
35.129
31.841
30.000
22.794
25.000
20.000
17.405
15.000
16.602
10.000
8.580
9.049
5.000
90
91
39.252
31.357
33.902
29.937
33.430
31.460
19.383
19.958
16.454 15.395
9.927
9.414
92
93
17.017
14.754 15.915
18.425 17.668
17.676
20.627
11.645
94
95
96
97
98
99
00
01
Source: General Directorate for International Economic Affairs
02
03
04
05
06
Chile’s Trade with the World
(Exports, 2006)
Nafta
22%
Others
3%
Asia
33%
South
Korea
18%
Europe
29%
Others
10%
Asean
5%
LA
13%
India
8%
Japan
33%
China
26%
Chile’s Trade with the World
(Imports, 2006)
Nafta
20%
Others
8%
Asia
23%
Japan
15%
LA
34%
Taipei
4%
South
Korea
23%
EU
15%
China
46%
Others
12%
CHILE’S TRADE
AGREEMENTS
EFTA
(European Free Trade Association,
EU
Canada
Iceland-Norway- SuitzerlandLiechtenstein)
USA
China
Turkey
South Korea
Mexico
Japan
Cuba
El Salvador
Costa Rica
Vietnam
Guatemala
Panama
Honduras
Brunei
Colombia
Peru
In Force
Signed
On Negotiation
New Zealand
Malaysia
Uruguay
Paraguay
Argentina
Brazil
Bolivia
Venezuela
Ecuador
Singapore
Australia
India
Chile has Preferential Market Access to 86% of world GDP
CHILE’S AGREEMENTS
TO AVOID DOUBLE
TAXATION
Canada
USA
Norway
Denmark
Sweden
Netherlands
Finland
Spain
France
UK
Ireland
Poland
Croatia
Hungary
Italy
Czech Republic
Switzerland
Rusia
Mexico
South Korea
Malaysia
Thailand
Cuba
In Force
Signed
On Negotiation
Argentina
Brazil
Ecuador
Peru
Venezuela
Paraguay
China
South Africa
Australia
New Zealand
(In force since
January 2007)
Latin America / Asia Trade Exchange
2000
Asia/Oceania
Chile
World
5.543 (*)
Share (%)
Argentina
Share (%)
Share (%)
Share (%)
25.996
53.912
13.156
Share (%)
166.368
6.248
Share (%)
6.862
14,46%
45.770
13,65%
17.455
134.854
12,94%
1.078
24.212
4,45%
5.284
1,04%
992
55.883
29,16%
2,51%
1.726
Peru
16.296 (*)
9,45%
330
Mexico
World
8,44%
5.095
Colombia
18.425
Asia/Oceania
30,08%
2.193
Brazil
2006
248.817
2,12%
4.221
22.712
18,58%
Source: Central Bank of Chile, Latin America Integration Association
(*) Considering only countries with trade agrements in force - China, Korea, India, Japan, P 4 (Chile, New Zealand, Singapore and Brunei) - and
with ongoing negotiations - Malaysia, Vietnam and Australia
ASEAN / LA Main Figures
LATIN
AMERICA
BRAZIL
MEXICO
ARGENTINA
CHILE
COLOMBIA
PERU
(selected
countries)
ASEAN
TOTAL
POPULATION
(THOUSAND)
190,127
107,537
38,971
16,436
46,772
28,349
428,192
585,000
GDP
(US$ BILLION)
1,067,706
840,012
212,702
145,205
135,075
93,268
2,493,968
1,072,824
GDP PER
CAPITA
(US$)
5,616
7,811
5,458
8,875
2,888
3,290
5,824
1,890
INCOME PER
CAPITA
(US$ PPP)
9,108
11,249
15,937
12,983
8,091
6,715
EXPORTS FOB
(US$ MILLION)
137,470
250,397
46,423
57,757
24,373
22,737
539,157
750,708
IMPORTS CIF
(US$ MILLION)
95,903
256,290
34,160
34,912
26,162
15,294
462,721
654,097
Source: Latin American Integration Association General Secretariat and ASEAN Secretariat
-
5,210
Chile: Springboard into New Markets
Chile is the best alternative for foreign companies seeking to
invest and expand their commercial interests across the South
American market, due to:
1.
Dynamic Business Environment
2.
Preferential Market Access to 86% of world GDP and 3.880 million potential consumers
3.
Sound Macroeconomic Fundamentals
4.
Outward Looking Economy
5.
Qualified Human Capital
6.
Solid Guarantees for Foreign Investors
7.
Modern Infrastructure
8.
High Marks from International Institutions
9.
One of the most stable and modern countries in Latin America
Chile: In the Middle of the Road
• Australia and New Zealand: the only two
developed countries in the southern hemisphere.
• Could Chile become the third one?
• What did New Zealand back in the 1980s?
-R+D
- Education
- Open market
- Institutional rebuilding
• What Chile must do in the coming years?
- R + D, Innovation
- Education (quality improvement)
- Social cohesion (equal opportunities and income distribution)
- Institutional modernization
Chile – New Zealand
OPPORTUNITIES FOR MULTILATERAL COOPERATION:
• P4
• APEC
• Cairns Group - WTO
• South Pacific Regional Fisheries Management Organization
• Climate Change
Chile – New Zealand
OPPORTUNITIES FOR BILATERAL COOPERATION:
• Research and Innovation
• Education
• Public Policies
• Institutional Building and Modernization
• Environmental Policies
Chile – New Zealand (2007)
INDEX
NEW ZEALAND
CHILE
4.115.771
16.284.741
Population Growth Rate
0,95%
0,92%
GDP PPP (US$ billion) 2006
105.8
212.7
GDP 2006
103.4
145.2
GDP Growth Rate 2006
1.5%
4.0%
25,531
12,983
Population
GDP (PPP per capita) 2006
GDP by sector
Labor Force
Agricultural:10 % Industry 26,9 %Services 68,8%
Agricultural 5,9 % Industry 49,3 % Services 44,7 %
2,18 millions
6,94 millions
Unemployment
3,6 %
7,8 %
Inflation Rate
3,8 %
2,6 %
Gross Fixed Capital Formation(% GDP)
22 %
21 %
Government Debt (% GDP)
19,9%
3,9 %
Exports (US$ thousand) – 2006
21.818.288
57.756.000
Imports (US$ thousand) - 2006
27.182.782
34.912.000
47.000
47.590
External Debt (US$ million)
Chile – New Zealand (2007)
INDEX
NEW ZEALAND
CHILE
1º Milk in powder, not containing added sugar or other
sweetening matter
2º Meet of Bovine animals, frozen and boneless.
3º Meet of Sheep (pieces) frozen, no boneless
4º Aluminum unwrought , no alloys
1º Cathodes and sections of cathodes, refined copper
2º Cooper minerals and concentrated
3º Molybdenum minerals and concentrated, roasted
4º Unrefined Cooper, cooper anodes for electrolytic
refining
Main Export Markets
1º Australia
2º United States
3º Japan
4º China
1º United States
2º Japan
3º China
4º Netherlands
Imports by Products SH6
1º
Petroleum oils and oils obtained from bituminous
minerals, crude
2º Petroleum oils and oils obtained from bituminous
minerals, preparations not elsewhere specified or included
3º Vehicles automobile to transport persons. Cubic capacity
up to 1500 cm3
1º Petroleum oils and oils obtained from bituminous
minerals, crude
2º Petroleum oils and oils obtained from bituminous
minerals, preparations not elsewhere specified or
included
3º Others Molybdenum minerals and concentrated
Main Import Markets
1º Australia
2º China
3º United States
4º Japan
1º United States
2º Argentina
3º Brazil
4º China
Exports by Products SH6
Bilateral Trade Chile - NZ
(thousands of dollars)
Exports from NZ to Chile
Exports from Chile to NZ
65.373
43.353
22.300
Chile – New Zealand (2007)
INDEX
Economy Features
Investigation and Development (I+D)
Central Bank
Exchange Rate Policy
Ranking Corruption Perception Index
2006
GNI Coefficient Income Distribution
NEW ZEALAND
Small and open
Based on Natural Resources Exports
CHILE
Small and open
Based on Natural Resources Exports
1,16
0,68
Independent
Independent
Flexible
Flexible
1
20
36,2
55,6
Chile’s Challenges
Trade and Investment increase and
diversification
Increase productivity
Investment springboard
Bridge to Latin America
Chile / New Zealand's Common Vision
Built on the basis of fundamental principles and
sustained on solid grounds:
• The Rule of Law
• Democracy
• Market Oriented and Open Economy
• Strong and Cohesive Society
• Mutual Benefit and Respect
A commitment to work together and grasp on the
opportunities ahead for the well-being of our people.
Chile – New Zealand
A Transpacific Relationship
Mr. Carlos Furche
Director General for International Trade and Economic Affairs
Ministry of Foreign Affairs, Chile